The critical role of sustainable mining in achieving net-zero targets

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As counterintuitive as it may seem, the mining industry is crucial to achieving long-term environmental sustainability goals. This is because minerals such as copper, nickel, lithium, cobalt, and rare earth elements play a key role in transitioning to greener energy. They are the building blocks for technologies that drive renewable energy, electric vehicles, and a digital economy. The demand for these critical minerals is growing rapidly as industries and governments work toward meeting net-zero emissions targets.

Growing Demand for Critical Minerals

The scale of demand for sustainably mined minerals is astounding. Bloomberg NEF estimates that $10 trillion of metals will be required by 2050 to meet global climate targets. The International Energy Agency predicts that by 2040, green energy initiatives will be responsible for 45% of global copper demand, 61% for nickel, 69% for cobalt, and 92% for lithium.

Additionally, the rate of copper production required is staggering. The world needs to produce more copper in the next 12 years than in the past 120 years to meet the rising demand. In the U.S., demand for lithium, copper, and cobalt is expected to increase 23 times by 2035 compared to 2021 levels. These statistics paint a clear picture: the transition to a sustainable economy hinges on the availability of these critical materials, and the mining industry must play a central role in meeting that demand.

Challenges Facing the Mining Industry

The mining sector faces numerous challenges that complicate the path to sustainably meeting the demand for critical minerals.

1. Declining productivity of existing ore bodies: Known ore bodies are becoming less productive, meaning that extracting a unit of the desired mineral requires more raw ore and energy. This increases operational costs and energy consumption.
2. Slow development of new mines: Developing new mines takes decades from discovery to full operation. For example, copper mines—vital to electrification—take an average of 24.1 years globally and 31.8 years in the U.S. to become operational. This lengthy process, exacerbated by complex regulatory frameworks and potential litigation, hinders efforts to ramp up production of critical minerals quickly.
3. Reliance on external partners: S&P Global has shown in recent research that US demand for key energy transition minerals is set to soar over the coming decade. Despite a huge and strategically important mineral endowment, the U.S. is under-utilizing its own natural resources. This is largely due to the complex permitting legalities and long development periods. Since 2002, only 3 mines have come online in the US. Ten more remain under development. This leaves the U.S. dependent on external partners – and vulnerable to market shifts – as it tries to meet its energy transition goals.
4. Limited investment: Investment in mining has also been sluggish in recent years. Expansion capital spending has fallen from over 20% of EBITDA to around 10% in the past few years. This is due to various factors, including fluctuating commodity prices, changes in regulatory environments, and economic uncertainties, such as inflation and interest rates. Furthermore, geopolitical tensions, labor unrest, and natural disasters pose additional risks to the reliability and productivity of mining operations.

Without significant improvements in the supply of minerals and efficiency of mining operations, the world could face serious commodity deficits. This would undermine efforts to transition to renewable energy and electrification and meet net-zero targets.

Bridging the Supply-Demand Gap: Solutions for Sustainable Mining

To bridge the gap between demand and supply, the industry must embrace new technologies and strategies to make mining operations cleaner, more efficient, and more productive.

1. Electrification of Mines: Electrifiying mining operations – and their downstream processing and refining operations – is a critical first step in reducing the industry’s carbon footprint. While many mines are already electrified, the source of that electricity matters. Using fossil fuels to generate electricity will do little to reduce overall emissions. To be sustainable, mines must switch to green energy sources such as solar, wind, hydrogen, or nuclear power. By integrating renewable energy, mining companies can significantly reduce their emissions and become more sustainable.
2. Digitalization of Mining Operations: Digitalization can potentially transform mining operations. By integrating smart sensors and devices into existing systems, mining companies can collect real-time data on every aspect of their operations. This allows for optimizing processes, reducing energy consumption, lowering carbon emissions, and increasing output. Digitalization also enables predictive maintenance, which reduces downtime and improves efficiency. For example, digitalizing power infrastructure and industrial processes can provide more insights into how the two systems interact. This leads to better decision-making, faster processes, reduced costs, and improved product quality.
3. Process and Power Management: Sustainable mining operations require an integrated approach to managing power and processing systems. By digitalizing and optimizing both, companies can reduce energy consumption, maximize output, and improve efficiency. For energy-intensive processes, combining data from electrical distribution systems with industrial automation control systems allows for better coordination between power and process systems. This approach leads to higher productivity and lower emissions.
4. Recycling and Circularity: One of the most promising solutions to increase the supply of critical minerals is recycling. For example, about 30% of global copper demand is already met through recycling. Improving the recycling process for critical minerals can reduce waste and significantly lower emissions compared to newly mined materials. Recycling also reduces the need for mining new resources, helping to preserve natural ecosystems and minimize the environmental impact of mining.
5. Accelerate Development of New Mines: Given that it currently takes decades to realize a new mine, government policies must be updated and expanded to address exploding market demand. This is especially urgent for critical and rare earth minerals. These policies must include higher investment in mining projects, accelerated permitting processes, and a process to resolve other issues (like land claims) that could delay or block mine development.

Next steps to improving sustainability

The mining industry is at a crossroads. While it faces significant challenges in meeting the growing demand for critical minerals, it also can be a major driver of environmental sustainability. By adopting sustainable practices and embracing technological innovations, the mining sector can help bridge the gap between supply and demand. This will ensure a steady flow of essential materials while minimizing its environmental impact.

If you are considering the next steps in your mining operation’s sustainability journey, visit Schneider Electric and AVEVA at Booth #11917 at MinExpo 2024 in Las Vegas, September 24 -26. Or, download our report: “Green Mining Industry Perspectives: Pathways to Sustainability in Mineral Processing,” to find out more about how we can help you optimize the different functions across your mining business, mitigating information silos and enabling sustainable mining.